If you want to take the QBI deduction or an ordinary loss you better be issuing 1099s...

Whenever there is an insurance claim on a property, it will remain in a national property claim database called the Comprehensive Loss Underwriting Exchange (CLUE) for five to seven years.

Or can they be written off as a loss/break even"?

The issue is related to the feasibility of the custodian correctly issuing payments/ investment expenses, and Home depot wanting an immediate payment. 

Is this feasible as part of an addition to airbnb or vrbo? 

Costs Non-recurring Closing costs - 6% of purchase priceMonthly  % Vacancy and Credit Losses - 5-10% of monthly rent Property Management Fees - 8-11% of monthly rent Real Estate Taxes - actual from folio # Repairs and Maintenance - 5-15% of monthly rent Rental Property Insurance - 2,000 Homeowners/Property Association Fees - 0 Capex reserve - 1% of purchase price Utilities  Water and Sewer - tenant Gas and Electricity - tenant  Garbage - tenant Cable, Phone, Internet - tenant - tenant

Unless you form a C Corp or elect C Corp status (both generally not advisable), you will have a pass through entity so the tax on your cut of the profit/loss will be calculated on your personal 1040 tax return.  

Basically I just want to be able to have walk away money of what we are paying in case of a total loss along with only having claims that would be above the $10,000 threshold and above.

It is always better to keep a tenant than to try to evict one - unless of course you are losing so much money that the vacancy loss is better than what you currently are getting - but this does not seem to be the case in your situation. 

I'm no tax guy  but passive 'losses' can only offset earned income if you're a RE professional as far as I know.